Dollar consolidates gains amid cautious optimism on tariff deal

Monday,   11-Nov-2019   08:58 AM (IST)

The dollar held near multi-week highs on Monday amid optimism that the United States and China would roll back tariffs that have hurt global growth. Against the Australian dollar the greenback stood just below a two-week peak at $0.6857. Against the New Zealand dollar , it was close to a month high at $0.6336, and likewise against a basket of currencies (DXY) at 98.358. Moves were slight as traders kept a wary eye for further news on the U.S.-China trade war. Officials from both countries said late last week that a rollback of some tit-for-tat tariffs had been agreed. Even though that was subsequently denied by U.S. President Donald Trump on Friday, he did not completely rule out a deal and U.S. benchmark treasuries held above a key support level at 1.9%, buoying the currency. The dollar was marginally weaker against the euro and Japanese yen, reflecting some investor caution that the deal could still unwind. The greenback stood at $1.1020 per euro and at 109.23 yen. The Chinese yuan was marginally weaker in offshore trade, but still on the strong side of 7-per-dollar at 6.9892 in offshore trade. With the United States on holiday for Veterans Day, focus is likely to be on news headlines, British economic data due later on Monday and a rate-setting meeting of the New Zealand central bank later in the week. Britain's economy has lost momentum this year, hurt by a global downturn due to the U.S.-China trade war as well as increased uncertainty over its exit from the European Union. It is forecast to have grown 0.4% for the quarter. The British pound , whose fate is now closely tied to the outcome of an election set for Dec. 12, edged higher to $1.2795 in Asian trade.